Virgin Atlantic calls time on Little Red subsidiary

6th Oct 2014

Little Red was launched to much fanfare early last year

Virgin Atlantic has announced its intention to cease its Little Red operation next year.

Its daily services between London Heathrow and Manchester will continue until the end of March 2015, while its flights between London Heathrow and Edinburgh and Aberdeen will continue throughout summer 2015 with the final flights in September 2015.

Little Red was launched in March 2013 as an attempt to reintroduce consumer choice on key domestic services after British Airways’ takeover of bmi created a monopoly on the routes.

Over the past eighteen months, Little Red has delivered for consumers, leading the way on customer service and on-time performance at Heathrow.

Flying well over a million passengers between London, Scotland and Manchester, Little Red also offers convenient onward connections to the rest of Virgin Atlantic’s worldwide network.

However the demand has been predominantly from point to point customers rather than connecting traffic.

High levels of connections onto Virgin Atlantic’s long haul network have always been important to the success of Little Red.

Chief Executive Craig Kreeger has committed to returning Virgin Atlantic to profit by the end of this year and the airline is on track to deliver that, however Little Red has unfortunately not been able to make a positive contribution to Virgin Atlantic’s network.

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Kreeger said: “It was always a huge challenge on behalf of the consumer, as the totally inadequate number of slots made available by the European Commission did not deliver close to BA’s network position, even when supplemented by our own slots to fly between Heathrow and Manchester.

“The time lag between the takeover of bmi and our entering the market also meant Little Red initially faced an uphill battle to win recognition and convert customers to its services.

“While this challenged environment meant Little Red ultimately did not deliver the results we had hoped, this certainly will not dampen our enthusiasm to try new things in the future.

“We have always fought for what we believe is best for our customers and we will continue to do so.

The decision on the airline’s short haul carrier follows a major review of Virgin Atlantic’s wider network.

Last month the airline announced a network update delivering five new daily transatlantic flights and an ambition to grow to record levels of sustained profitability by 2018.

This will be supported by a major programme of work that will see £300 million invested into customer experience.

Virgin Atlantic president Richard Branson added: “When the competition authorities allowed British Airways to take over British Midland and all of its slots, we feared there was little we could do to challenge BA’s huge domestic and European network built through decades of dominance.

“To remedy this, we were offered a meagre package of slots with a number of constraints on how to use them and we decided to lease a few planes on a short term basis to give it our best shot.

“The odds were stacked against us and sadly we just couldn’t attract enough corporate business on these routes.”